3. ABC Casualty may amend its by-laws to require ABC Bureau membership
for certain kinds of insurance but not for automobile or homeowners policies.

4. If ABC Casualty amends its by-laws so that it is no longer an
insurer that is organized for the sole and exclusive purpose of providing insurance
policies to members of an organization, it will no longer be able to use N.Y. Ins. Law §
3425(g) (McKinney Supp. 2002) as the basis for non-renewal of an automobile liability
policy.

Facts:

No facts were provided. The inquiry is general in nature.

Analysis:

ABC Casualty would be permitted to amend its by-laws to provide for any
of the above three alternatives, provided that the amendment would not in any way
discriminate against a protected class.

However, if it did so, its ability to rely on N.Y. Ins. Law § 3425(g)
(McKinney Supp. 2002) as a ground for non-renewal of automobile liability policies would
be affected. Section 3425(g) provides:

Notwithstanding any of the provisions and limitations of this section,
any property/casualty insurance company organized for the sole and exclusive purpose of
providing insurance policies to members of an organization and providing such insurance
policies on risks in New York, may refuse to renew automobile liability policies of
persons who fail to meet the requirements contained in the by-laws of such company
prohibiting the sale of policies to non-members of the organization, provided that such
company shall continue to participate in any assigned risk plans established pursuant to
article fifty-three of this chapter.

Pursuant to Section 3425, an insurer that is organized for the sole and
exclusive purpose of providing insurance policies to members of an organization may refuse
to renew automobile liability policies, other than assigned risk policies, of persons who
fail to meet the membership requirement. Under any of the scenarios that were presented,
once an insurer amended its by-laws so that membership in the organization was no longer a
requirement for the issuance or renewal of a policy, the insurer would no longer be
organized for the sole and exclusive purpose of providing insurance policies to members of
an organization and, accordingly, could not premise non-renewal of an automobile liability
policy on this reason.

For further information you may contact Supervising Attorney Joan
Siegel at the New York City Office.